Ningbo divorce fund financial division 5 types of share algorithm.

Fund management has become an important part of the asset allocation of many families, and more and more people are put on the negotiation table in divorce. But there are a wide variety of funds, including money funds, bond funds, equity funds, hybrid funds, index funds, QDII funds, as well as regular open, holding period, closed-end products, each of which is divided in different ways. To complicate matters more, many funds are held through fixed investment, the costs are spread at different points in time, and the choice of selling point also directly affects the split results.

The scope of 1. fund financial management as the joint property of husband and wife.

Article 1062 of the the People's Republic of China Civil Code stipulates that the property such as wages, bonuses, remuneration for labor services, income from production, operation and investment earned by husband and wife during the marriage relationship shall be the joint property of husband and wife. As an investment asset, the part and income obtained after marriage belong to the joint property of husband and wife in principle.

Funds purchased after marriage

funds purchased with the joint income of husband and wife after marriage, whether purchased through direct selling platforms of banks, securities companies, fund companies or third-party Internet platforms, belong to the joint property of husband and wife. Divorce shall be divided according to law.

Funds purchased before marriage

the shares of the fund already held by one party before marriage and their natural appreciation after marriage are usually personal property. However, if the fixed investment, additional investment or active position transfer is continued after marriage, the portion of the investment after marriage and the corresponding income are common property.

2. Stratification of Pre-marital Holding and Post-marital Inputting

the first task of the division of the fund account is to distinguish between the pre-marital personal part and the post-marital common part.

Bound by the date of marriage registration

similar to stock accounts, fund splits also take the marriage registration date as an important node. The shares of the Fund held prior to the registration date and their natural appreciation after marriage are personal property; the shares and proceeds purchased after the registration date are common property.

Treatment of additional investment after marriage

if the joint property continues to be invested or purchased after marriage, even if the account already exists before marriage, the new share after marriage is also common property. It is important to note that additional inputs may change the cost of holding the original share, and the cost and market value of the pre-marital and post-marital shares should be calculated separately when splitting.

Segmentation algorithm for 3. 5 types of fund products

different types of funds have different liquidity and risk-return characteristics, and their segmentation varies.

Category I: Monetary Fund

money funds are highly liquid, with little volatility in net worth, and are usually split directly by account balance. Cash can be split after redemption, or one party can keep the account and pay the other half of the balance at a discount.

Category II: Bond funds

the net value of bond funds will fluctuate to some extent, but is generally relatively stable. The market value can be calculated at the net value at the point of divorce, or a mutually acceptable point of sale can be negotiated and divided according to the actual amount realized.

Category III: Equity funds and hybrid funds

the net value of equity funds and hybrid funds fluctuates greatly, and the choice of split point has a great influence on the results. Generally based on the net value at the time of divorce or at the end of the first instance debate; if one party wishes to continue to hold it and the other party receives a discount, the net value at that point is calculated.

Category 4: Index funds and ETFs

index funds and ETFs track specific indices, are more liquid and can be traded in the secondary market. The division is similar to that of stocks, which can be either physically divided or realized at a discount. If the account is held with a securities firm, non-trading transfers can usually be made.

Category 5: QDII funds and commodity funds

QDII funds invest in overseas markets, there is exchange rate risk, and redemption time is longer. Commodity funds, on the other hand, are linked to commodity prices and are more volatile. When dividing these two types of funds, in addition to calculating the net value, the exchange rate effect and redemption cycle should also be considered, and if necessary, settlement after redemption can be agreed.

The cost calculation of 4. fixed investment funds.

The cost of a fixed investment fund is not a one-time purchase price, but the average cost of multiple purchases. Divorce division needs to distinguish between pre-marital fixed vote, post-marital fixed vote and post-divorce fixed vote.

average cost method

for the post-marital fixed-share portion, the average cost of all fixed-share amounts during the marriage can be calculated and multiplied by the share as of the point of division to arrive at the market value of the post-marital common property. If there is also a fixed investment before marriage, the cost and market value of the premarital share need to be calculated separately.

The application of the first-in-first-out method.

At the time of redemption, if it is not possible to distinguish which share is redeemed, the first-in, first-out method is sometimes used in practice: the earliest purchased share is redeemed first. This approach may be detrimental to the party with a higher number of post-marital fixed votes, and the specific caliber to be used needs to be negotiated between the parties or at the discretion of the court.

Treatment of 5. Closed Period and Holding Period Funds

closed-end funds, regular open-end funds and holding period funds cannot be redeemed within a specific period of time, which creates operational difficulties for divorce segmentation.

Physical division when redeemable

if the fund is in a closed period and cannot be liquidated, it may be negotiated that one party will hold the entire share and pay the corresponding discount to the other party after opening for redemption. The agreement shall specify the operating time limit, the basis for calculating the discount and the liability for breach of contract after opening.

Early redemption restrictions on holding period funds

holding period funds may charge high redemption fees for redemptions before the end of the holding period. In the event of a divorce split, unless both parties agree to bear the redemption fee, they usually choose to retain the share, discount compensation, rather than forced redemption.

The choice of 6. redemption and discount compensation.

There are two basic ways to split the fund: first, cash split after redemption, and second, one party retains the share and pays the discount to the other party.

Pros and Cons of Redemption

redemption is simple and direct, but may result in redemption fees, taxes and market timing losses. Both sides suffer if forced redemptions at market lows. Therefore, the choice of redemption point needs to be cautious.

Advantages and Disadvantages of Discount Compensation

discount compensation can avoid redemption fees and market point losses, but a reasonable discount benchmark and payment method need to be determined. If one party is concerned that the other party will not pay the discount in the future, it may request a one-time payment or set up a guarantee.

7. case proof

according to similar rules, a party buys funds through multiple Internet platforms after marriage, including money funds, bond funds and stock funds, and disputes over the division of funds in the event of divorce. The court usually requires the submission of fund position details and transaction records of each platform, dividing the shares before and after marriage by the date of marriage registration, and calculating the market value of the portion purchased after marriage according to the net value at the time of divorce and dividing it equally. For funds in a closed period, it is usually decided that one party holds them and pays a discount to the other party after opening for redemption. In similar cases, the amount of division or compensation is usually in the range of $100000 to $3 million, depending on the size of the property and the circumstances of the evidence.

According to similar rules, one party starts to invest in an index fund before marriage and continues to invest after marriage, with a large floating profit in the account at the time of divorce. The court usually recognizes the pre-marital share and its natural appreciation after marriage as personal property, and the portion of the fixed investment after marriage and the corresponding income as the joint property of the husband and wife. In calculating the post-marital share, the value of common property is generally determined using the average cost method of the fixed investment amount during the marriage, combined with the net value at the point of divorce. In similar cases, the amount of division or compensation is usually in the range of $100000 to $3 million, depending on the size of the property and the circumstances of the evidence.

8. Risk Alert

• ignoring the distinction between pre-marital and post-marital shares leads to the erroneous inclusion of personal property in the division.
• Calculated at the cost of purchase rather than the net value at the point of divorce, it does not reflect the true market value.
• Forced redemption of closed and holding period funds, resulting in high redemption fees and market losses.
• The payment period and basis for the discount were not agreed upon, and subsequent execution was disputed.
• Missing the fund account of the Internet platform, resulting in the common property is not fully inventory.

9. FAQ

how is the fund bought after marriage divided into divorce?

The fund purchased with the common property after marriage belongs to the common property of the husband and wife, and the market value is generally calculated according to the net value at the point of divorce and divided equally, which can be redeemed and divided after realization, or one party can retain the share and pay a discount to the other party.

The fund bought before marriage will continue to invest after marriage. How will the part be counted after marriage?

The pre-marital share and its natural appreciation are personal property; the post-marital fixed portion and the corresponding proceeds are common property. The post-marital portion is usually valued at the average cost of the fixed amount during the marriage combined with the net value at the point of divorce.

The fund is still closed, can it be divided during divorce?

Can be divided. Usually the entire share is held by one party and a discount is paid to the other party upon opening for redemption. The agreement or judgment shall specify the operating time limit and the calculation method of discount after opening.

What is the cost of a fixed investment fund?

The post-marital fixed investment component can be calculated as the average cost of all fixed investment amounts during the marriage and multiplied by the share as of the point of division to arrive at the market value. The specific caliber may be negotiated by the parties or at the discretion of the court.

Practical Experience of 10. Lawyers

the division of fund management, first distinguish between "principal" and "income" from where. The principal portion of a fund bought before marriage and held until after marriage is usually still personal property, but the income generated after marriage, as well as the additional investment with common property, enters the scope of the common division. So the first step is to retrieve the account's transaction details and position records, the purchase time, purchase amount, redemption flow according to the timeline, to distinguish which part is the capital, which part is the post-marriage investment. Without complete running water, any algorithm is a castle in the air.

Different products are handled differently. Open-end funds can be calculated according to the current market value; The frequent flow of monetary funds depends on the accumulated investment rather than the balance at a certain time point. For fixed investment, the source and time of funds for each period should be clearly corresponding, and the pre-marital investment and post-marital investment should be calculated separately. If there is a closed period or holding period restriction, it cannot be forcibly redeemable, and the influence of term and liquidity should be considered. Mixed accounts that do not distinguish between sources can often only be divided according to the overall value, which is not necessarily beneficial to the input side, but also reminds the usual sub-account management.

Settlement to choose their own program. You can retain a share of one party, compensate the other party at a pro rata discount, or redeem the sub-payment together, depending on the current market position, tax costs and your judgment of subsequent ups and downs. If you are concerned about the other party's early redemption or transfer, apply for preservation of the locked account in a timely manner. In the whole process, the calculation caliber should be unified before the negotiation, and it is more efficient to negotiate the three things of "which is common, at what price, and by whom" than to argue about a certain transaction afterwards.

The key to fund financial segmentation lies in stratification and classification: first distinguish between pre-marital and post-marital shares, and then choose a liquidation or discount compensation scheme according to the liquidity and risk characteristics of different fund products. Fixed investment funds need to calculate the average cost, while closed and holding period funds need to avoid losses from forced redemptions. It is suggested that when the divorce property is divided, the fund accounts of each platform should be comprehensively sorted out, the complete transaction records and position details should be obtained, the division value should be determined based on the net value at the point of divorce, and the specific operation mode of redemption or discount compensation should be clearly defined in the agreement to prevent subsequent disputes.